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The starting point of any successful financial plan is identifying and quantifying your personal goals. It’s a process of setting out what makes up your ideal lifestyle. Once you have defined your goals, realistic financial strategies can be put in place to achieve them and improve your lifestyle (or standard of living).
Without setting clear goals, it will be difficult to know whether a desired lifestyle for yourself and your loved ones is attainable.
How to set and achieve your goals
Many experts have written about setting and achieving goals. The following key factors are shared between them:
- Write down your goals, dreams, aspirations, and milestones
- Break them down into smaller bite-sized tasks
- Embrace failures in achieving them as a learning experience
The SMART system
Using the acronym SMART is a proven method in guiding individuals to establishing their goals:
- S (write down specific goals) – “What do you want to achieve?”
- M (make your goals measurable) – “How will you track your progress?”
- A (make your goals achievable) – “How will you do it?”
- R (Relevant) – “Is this relevant to your life right now?”
- T (Time-bound) – “When do you want to do it?”
(Source: SMART Goals 101: Examples & Free Templates and Worksheets (briantracy.com))
Refer to what you have written on a regular basis and review your progress. This process can be followed for any goal you wish to achieve, whether it is to save more or a personal bucket list item.
Typical lifestyle goals
Although you will have your own unique set of goals, we provide some typical examples you may be planning towards.
(Source: Old Mutual Wealth Integrated Wealth Planner Goal Setting)
Examples
- Family needs – growing your family.
- Work & Retirement – comfortable retirement or increasing your income.
- Home – buying a new home, home improvements or safeguarding your home (e.g., insurances, safety measures)
- Education –yourself, or a dependent learning a new skill or graduating.
- Cars – replacing your vehicle every few years or maintenance costs of your current car.
- Travel – local or overseas travel and how often you plan to do so.
- Legacy – what would like to leave behind for your family or how you want what is important to you to be maintained after your passing.
- Recreation – social, entertainment or active experiences.
- Other – bucket list items such as learning a new language or running a marathon
The next steps – your financial plan:
Setting your goals is the first step to achieving your desired lifestyle. The next steps are as follows:
- List your current financial position: your assets, liabilities, income, expenses, and risk cover.
- Establish your risk profile, by understanding how much risk you need, in order to generate an appropriate return that will aid you in achieving your goals; how much risk you can afford to take and how much risk you can personally handle.
- Review your saving and spending habits to effectively make provisions for your goals.
- Optimise your tax and liquidity needs by using the correct investment vehicles.
- Determine the appropriate investment strategy to match your desired returns.
- Construct the best investment portfolio for your investment strategy.
- Regularly monitor your financial plan to ensure it is on track and that any financial or lifestyle changes are incorporated into an updated plan.
At Investonline, we assist clients with every step of this process by compiling a holistic financial plan via video meetings and screen sharing using our state-of-the-art digital tools.
Contact us to provide you with a clear path to help achieve these goals. Our financial planning process will help you discover financial techniques in managing your cash flow, your tax liabilities and how to effectively save money, to ensure you can achieve your goals.
Please click here to speak with one of our Client Portfolio Managers to see how we can assist you.